Enterprise Budget: Popcorn

Popcorn ( mays everta) has been Unlike the U.S., however, Iowa’s popcorn the All-American food for years. production declined from 2002 to 2007. Enterprise Assessment Demand for popcorn has remained Capital needed steady throughout years past with a Agronomic Characteristics for startup peak in the 1990’s. In the 1980’s, sales Seedbed preparation is very similar to increased with the introduction of regular corn with planting time in April Importance of and in 1999 mi- through Mid-May. Popcorn grows best experience with crowave popcorn accounted for 72% of in medium to coarse textured soils since grain crops sales. In the 1940’s Iowa was the num- they are slower germinators. No-till ber one producing popcorn state. Today is actually a very common practice Managerial input the industry produces approximately 9 especially with well-drained soils. If needed million pounds of corn in 25 states. you have manure for a fertilizer source available the organic popcorn industry Popcorn is grown by less than one is continuing to grow. Fertility require- Labor input percent of U.S. farmers on less than required ments are also very similar with field one percent of the harvested acres. The corn. Popcorn has a less extensive root majority of popcorn is grown by farm- system, less efficient at utilizing nutri- Years needed to ers with over 100 acres so most popcorn ents, poorer stands, and also requires develop produc- is mechanically harvested. However, sulfur, , and iron. You can expect tion expertise the number of farms and the number nitrogen levels to be 15% lower than of acres dropped by over one-third the rate for regular yellow . Years needed to develop marketing from 2002 to 2007, but the produc- Yields do increase with the higher nitro- expertise tion increased by nine percent over the gen levels, but there is risk of lodging at same time period. Iowa is very similar too high of levels. For weed control use to the rest of the country with respect the regular cultural methods of yellow Years to financial to popcorn production. Less than one dent corn. break-even point percent of the farms and harvested crop Most popcorn is harvested with com- land is devoted to popcorn. From 2002 bines and mechanical machines. How- Return on to 2007 Iowa had a decrease of almost ever, there can be some kernel damage investment (%) 40 percent in the number of farms and which reduces popping volume, so the number of acres devoted to popcorn. some farmers use hand harvesting as an alternative. The production costs and time are greater, but in return there moisture when storing over the winter will be higher quality popcorn with and 12.5%–13.5% if storing for longer higher popping quality. In contracts periods of time. If it is mechanically it is normally the processor that will harvested it can be dried with a drying contract for hand harvesting for the system with two cubic feet drying air better quality. If using a combine, har- per minute per bushel of stored grain. vest with moisture between 14 and 18 Hand harvested grain dried in high percent and hand harvest with 18–20% volumes need a forced-air ventilation moisture. The popcorn harvested will system. A natural ventilation system can need conditioned for the best quality be used in a bin 3–4 feet wide and with kernel. Keep popcorn stored at 14.5% clean popcorn with minimal residue. 1 Popcorn

Risks the processors and producers. Processors normally choose what variety and how The highest risk is finding a many acres of popcorn they want. The place to market your popcorn. Almost all of the popcorn majority of popcorn is grown under grown in the U.S. is under contract, so the market is fairly stable. contract with a processor. With a stable market, contracts can Other possible markets are be at based on dent corn price which packaging and marketing makes growing popcorn competitive your own or selling at farm- and profitable. Some processors here in ers markets if you can not Iowa include: get a forward Potential Returns contract. Pro- Economic Considerations: duction risks are very Popcorn Production Budget Yields similar to . However, popcorn is Amount Price per Total ($) The Iowa state average yield in 2007 not as rigorous and per acre unit ($) was 3,979 pounds per acre. With a con- will not fair as well Recipients: version of 1 bushel corn=56 lbs, this as regular corn in less Popcorn 3400 lbs 0.1565 532.10 would be approximately 71.05 bushels than ideal conditions. to the acre. Popcorn is expected to yield There is also the risk of Variable Costs: about half of what regular dent corn producing corn that 10 lbs 2.50 25.00 would in a field. does not meet the qual- Nitrogen 130 lbs 0.68 88.40 ity standards set by the Raising popcorn is very similar to rais- Phosphate 50 lbs 0.90 45.00 processors. The biggest ing field corn but application rates of Potash 30 lbs 0.72 21.60 thing to prevent this is fertilizer are not as high. Lime 0.25 ton 14.00 3.50 monitoring moisture. Pesticides 20.00 Price Popcorn has a good popping ratio at 13.5 % Fuel, oil, and grease 20.00 Popcorn prices are very variable and moisture. When pick- Repairs 15.23 can range from anywhere from $12.5– ing out varieties look Miscellaneous 9.00 $16 per cwt. With the recent ethanol at the expansion ratio Int. on oper. 7 month 9% 13.01 boom more farmers are planting regular as a measure of quality cap. corn decreasing the number of pop- popcorn which is the Total Variable Costs 260.74 corn acres. This has helped increase the amount of increased market price of popcorn. The organic volume when the kernel Fixed Costs: industry has also had increased demand, pops. A good ratio is Operator 4 hours 11.00 44.00 so there may be potential for returns in between the ranges of Labor charge that niche market. 40–44. Anything lower Machine and equipment charge 40.00 will have chewy taste Land charge (rent) 175.00 Labor and anything higher a Total Fixed Costs 259.00 brittle taste. Popcorn requires the most labor in the Total costs 519.74 spring during planting season and in Marketing the fall during harvest. The time distri- bution would be similar to corn except Processor-contracted Return Above Variable Costs 271.36 for the extra time at harvest for drying Return Above Total Costs 12.36 Most popcorn is grown and storage. Every acre requires approxi- with a contract between Source: http://ohioline.osu.edu/e-budget/99popc.html mately 4 hours. 2 Popcorn

• Noble Popcorn Farms, Sac City Management http://www.oardc.ohio-state.edu/ho- corn/popcorn_index.htm • Vogel Popcorn (ConAgra Foods), Managing a popcorn enterprise would Hamburg be very similar to regular yellow dent http://extension.osu.edu/~news/story. corn. The big difference would be mar- php?id=2452 • Snappy Popcorn, Breda keting and selling the product which • Jolly Time Popcorn, Sioux City will take some extra resources. When Purdue University getting ready to harvest you will have http://www.ces.purdue.edu/extmedia/ Open Market to consider labor availability, market NCH/NCH-5.html Producers can choose to sell on the you are selling to, available storage, and open market. However, this can be a other available resources. You want to Agricultural Marketing Resource risky strategy because of the fluctuations produce high quality popcorn that con- Center sumers will enjoy. is prices. The producer always needs to http://www.agmrc.org/agmrc/commod- be aware of what is happening in the Market Outlook ity/grainsoilseeds/corn/popcornprofile. market and what can affect fluctuations. htm However, if you have good storage fa- Although the U.S. consumption of pop- cilities the popcorn may be stored until corn has declined a little over the past University of Kentucky several years, the world demand has in- market prices improve. http://www.uky.edu/Ag/NewCrops/in- creased. Some leading importers include trosheets/bluecorn.pdf Alternative Outlets , South Korea, United King- dom, Japan, and United Arab Emirates. Producers willing to take more risk can University of Seventy percent of popcorn is eaten in process and package their own popcorn the home and the other 30% outside in http://www.ianrpubs.unl.edu/epublic/ and sell it locally. This will take more movie theatres and other places. live/ec155/build/ec155-21.pdf time and resources to develop your product. Another alternative can be the Sources American Popcorn Processors livestock or poultry industry which can http://www.wyandotpopcornmus.com/ grind and feed popcorn. If your pop- Ohio State University lprocessors.htm corn is not good quality this can also be http://www.oardc.ohio-state.edu/ho- a way to sell it avoiding a total loss. corn/PopcornWorth.pdf 2007 Agricultural Census

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